A state-issued permit that allows a business to collect sales tax from customers and remit it to the state.
A sales tax permit (also called a seller's permit or resale certificate in some states) authorizes a business to collect sales tax on taxable transactions and remit it to the state revenue agency. If your business sells taxable goods or services in a state with a sales tax, you generally need to be registered and hold this permit.
The 2018 Supreme Court decision in South Dakota v. Wayfair changed the landscape significantly: states can now require businesses to collect sales tax even without a physical presence in the state ("economic nexus"). If your e-commerce business has enough sales in a state, you may need to register and collect sales tax there, even if you've never set foot in it. The threshold varies by state but is often $100,000 in sales or 200 transactions annually.
Sales tax compliance is one of the most commonly overlooked obligations for new businesses. Failing to collect and remit sales tax creates a liability for the uncollected amounts, which can accumulate significantly before anyone notices. If you're selling products (especially physical goods or digital products) in multiple states, a sales tax compliance service like TaxJar or Avalara can automate the process.